23 March 2009

Saving on cheques

"Traditionally the Council paid its suppliers by cheque. Taking into account the time spent printing and enveloping each payment, the cost of the cheque stationery and the envelope in which it was posted, as well as the actual price of the stamp and the fee from the bank, every time we paid a supplier it would cost roughly 53p. 

What we've now done is moved to BACS as our default method of payment. In the past there were a couple of things which put us off doing this. Firstly, there would be a need to contact our suppliers to find out their bank details and convince them that electronic payment was the way forward. Secondly, in order to minimise subsequent queries, we thought that we would still post remittance advices to the suppliers telling them that payment was on its way - this, of course, would negate some of the saving. 

However, times have moved on and most suppliers now include bank details on their invoices and request electronic payment. Very often email addresses are printed on invoices as well. All this meant that we could readily move over to BACS payment for very many of our suppliers, with remittance advices sent by email. Obtaining the missing information from other suppliers was simply a question of making a few phone calls. We are now making 83% of our supplier payments by BACS and emailing the remittances. In a year we make around 11,000 payments, so we will now be saving around £4,000 annually"


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